Introduction of Foreign Exchange (Compounding Proceedings) Rules, 2024

Dear Sir/Ma’am,

With the objective of streamlining the compounding process under FEMA, the Government has Foreign Exchange (Compounding Proceedings) Rules, 2024.

Following are the key changes introduced under the new Rules:

• The monetary limit of the RBI officers to compound the contravention has been increased from the erstwhile rules: 

• The compounding fees has been revised from Rs. 5,000 to Rs. 10,000 plus GST with an option to pay the fees through National Electronic Fund Transfer (NEFT), or other permissible electronic or online modes of payment.
• Discontinuation of adjudication: Where any contravention is compounded before the adjudication of such contravention under Section 16, no inquiry or further inquiry shall be initiated or continued, as the case may be, for adjudication of such contravention against the person in relation to whom that contravention is so compounded.
• Where any contravention is compounded before the adjudication of such contravention under section 16, no inquiry or further inquiry shall be initiated or continued, as the case may be, for adjudication of such contravention against the person in relation to whom that contravention is so compounded.
• Where the compounding of any contravention is made after making of a complaint  under sub-section (3) of section 16, such compounding shall be brought by the  compounding authority specified in rule 4 or rule 5, in writing, to the notice of the Adjudicating Authority and on such notice, the person in relation to whom the contravention is so compounded shall be discharged

These amendments have been brought to simplify the process, enhancing transparency, and ensuring quicker resolution of contraventions.

In case of any clarification, feel free to contact us.